Paul F. Goblet, Investment Advisor, NMSBIC

The Small Business Investment Corp (SBIC) was created by state legislation in 2000 to provide equity or loan capital to small businesses in New Mexico. Support for this legislation rested on the knowledge that small businesses – those with 25 or fewer employees – are the backbone of the state, sustaining the economies of local communities where they are located.   Most new jobs in the state have been generated by small businesses, and small firms represent the majority of business enterprises in New Mexico.

While it may be a cliché, investing on Main Street instead of Wall Street has paid big dividends in New Mexico, where existing businesses have been strengthened and new businesses have sprouted as a result. Improvements in the economy are visible from Clovis to Farmington and many towns in between, where jobs, employees and communities have flourished.

The challenge recognized by the Governor, Lt. Governor and Legislators was attracting new capital to businesses in small communities. Delivering capital to start-up firms was a similar priority, but difficulties arose around how to do it in a timely, cost-effective manner. The SBIC was created to address these challenges and to focus on making equity investments and business loans to New Mexico small businesses.

Most banks use a type of credit scoring matrix to determine if a loan will be made. Small businesses, particularly those just starting out, often have trouble qualifying for loans based on this type of scoring. In addition, small loans of $5,000 or more – those typically needed by small firms – are not very appealing to traditional lenders.
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Lt. Governor Diane Denish

As New Mexico’s lieutenant governor, one of my highest priorities has been to support small businesses throughout the state. I’ve owned a small business and know the challenges that confront people like me – particularly in finding the money and getting well-founded advice on how to start and maintain a business. The largest chunk of the business community is businesses that have fewer than 25 workers. While major employers like state, federal and local government, the military, financial service industry and health care providers provide a large number of jobs, small businesses are the ones creating new jobs and providing stability to smaller communities around the state.

In addition to an improved business environment and tax structure, providing investment capital has been a priority of our administration. Investments in large projects like Eclipse Aviation capture the headlines, but they’re not the only ones. Statewide, money to small businesses has been increasing. Private equity capital has been flowing into New Mexico at an accelerated pace, much of it aimed at the vast pool of technology developed at the national research labs and universities.

The State Investment Council has played a leading role in attracting venture capital funds. Since 1996, it has given money to funds that agree to set up shop in the state and invest in New Mexico companies. Those investments have increased over the past few years as nearly 20 funds have helped New Mexico businesses. One of them, Mesa Capital Partners, helped Aridien, Inc., a Belen company that makes the desiccant products you find in packaging. Aridien, which had four workers when it began searching for money to grow, will likely employ 30 people by year’s end, thanks to Mesa’s investment.

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